The sticker price for individual health plans sold on Michigan's Affordable Care Act exchange will jump 16.7% next year under new rates announced Monday by state officials.
The rates will be in effect Nov. 1, when open enrollment starts again on Healthcare.gov.
The double-digit increases will mean a financial hit for taxpayers in general, as well as some of the 393,322 Michiganders who currently buy individual health insurance on or off the government-run exchange.
Most people in Michigan who buy through the exchange do not pay full sticker price because they qualify for the Affordable Care Act's tax credit subsidies, which increase as the premiums increase. That means taxpayers will ultimately foot the bill for the higher cost of insuring people who get subsidies.
For their part, insurers say they need higher rates due to ever-rising health care costs, galloping prices for prescription drugs like EpiPens, larger-than-expected medical claims and the end of a federal "reinsurance" program that distributes money to health plans whose members have very high claims.
The approved rates are slightly smaller than the average 17.2% increase initially sought by the insurers. That was due to the insurance department's rate review, state officials said, adding that public comments on the proposed rates were considered in the process.
By comparison, last year the insurance department granted every insurer the exact rate increase it requested for individual plans -- producing a 6.5% increase from 2015 to 2016. State regulators vowed this summer to take an extra close look at the latest rates because of the especially large requests.
For small group policies (businesses with fewer than 51 employees), regulators approved rates an average of 2.5% higher in 2017, or 0.1% less than insurers sought.
"Ensuring rates are adequate but not excessive is critical to make sure consumers not only receive health insurance coverage at a reasonable price, but can count on the coverage they purchase,” Patrick McPharlin, the department's director, said in a released statement.
Still, most insurance companies got their full requested rate increase. This included a 14.8% increase for Blue Care Network, 18.7% for Blue Cross Blue Shield, 16.8% for Health Alliance Plan, 13.9% increase for Priority Health and 39.2% increase for Humana.
Aetna and Alliance Health were among the insurers that didn't receive the full increases sought.
Insurance companies insist that they are not trying to profiteer from the Healthcare.gov exchange. Some insurers, including Blue Cross Blue Shield, report losing money on individual plans they sell there.
McPharlin emphasized that Michigan still offers a competitive insurance market with multiple options for consumers through 10 different carriers. Consumers in some states have fewer options as more insurers exit the individual market.
Only a handful of insurance companies have pulled out of Michigan's exchange. Those include HMO plans by Harbor Health and UnitedHealthcare and PPO plans by Priority Health and Alliance Health, according to the insurance department.
Contact JC Reindl: 313-222-6631 or firstname.lastname@example.org. Follow him on Twitter @JCReindl.
Detroit Free Press